When you’re a Locust Grove rental property owner, it is essential to be familiar with the newest real estate terms. The real estate market is facing significant changes; keeping up with these changes can help you grow your portfolio and protect your investments. Furthermore, it can help you make rational choices when negotiating with prospective buyers or renters. It’s essential to understand the following six terms in a market that is competitive. Let’s observe each of them more closely.
iBuyer
Real estate companies known as “iBuyers” make instant offers on properties using technology. As they provide a simple and quick way to sell your home, these businesses have grown in popularity over the past few years. Since they offer homeowners much more convenience, iBuyers have significantly altered how people buy and sell residential properties.
D.O.M.
DOM is the abbreviation for “days on market”. The length of time a property has been up for sale is indicated by this metric. A property’s DOM is calculated from the date it was listed on the MLS (multiple listing service) until the date the seller signed a contract to sell. While a high DOM may be cause for concern, it can also be a sign of seasonal changes in the housing market (homes tend to sell faster in the spring than in winter). By checking the average DOM for a given region, you can determine whether the market is weak (high average DOM) or strong (low average DOM). Generally, a weak market favors buyers.
R.E.O.
“Real estate owned” is referred to as REO. Usually, because it didn’t sell at the foreclosure auction, this term refers to a property that’s been foreclosed on and is now owned by the lender. Due to the fact that many banks and lenders would rather sell a property than hold it, REO properties can present investors with the opportunity to buy below market value. The fact that these sales are frequently “as-is” makes financing challenging, so it is important to note this.
FHA 203k Rehab Loan
The purchase of a fixer-upper can be financed with an FHA 203k rehab loan, which is a government-backed loan. This kind of loan can be used to finance renovations and repairs, making it a desirable option for investors seeking to acquire properties in need of repair. It can also be used to improve the energy efficiency of older homes. It is not intended to be used for “luxury” features upgrades like a swimming pool.
D.T.I.
DTI refers to “debt-to-income” ratio. This metric is used by lenders to calculate the percentage of your income that is allocated to paying off debt. DTI is calculated by adding your total monthly debt payments and housing costs, dividing that sum by your gross monthly income, and multiplying that result by 100. It’s meant to determine how much mortgage you can manage. Keep this number low because a high DTI can make it tough to be approved for a loan. A lender favors borrowers who spend 36% or less on monthly debt payments and 28% or less of their monthly income on housing.
E.M.D.
EMD is an acronym for “earnest money deposit.” Also known as a “good faith deposit,” this is a deposit that buyers are required to make when making an offer on a property. An EMD can convince a seller to accept an offer by demonstrating the buyer’s seriousness and eagerness. The percentage of EMD offered varies depending on the circumstance and the level of market competition, but it typically ranges between 1 and 5%. The EMD is normally held in escrow and adapted to the purchase price of the home if the transaction closes.
As you can see, Locust Grove property managers need to be conversant with a wide range of real estate terminology. Knowledge is key in a competitive industry.
Your greatest asset in a market for rental properties that are constantly changing is having experts on your side. Contact us online to learn how you can gain access to insider knowledge and the best asset management services available.
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